MUFG Bank analysts, they continue to see the pair USD/CHF with a bearish outlook without much support to the 0.8500 area. They believe that Biden’s victory supports the prospect of a weaker US dollar.
Key statements:
“Over the past week, the CHF has performed better than the EUR, as the general weakness of the USD has accelerated. USD / CHF has broken below key support at the 0.9000 level, and now there is little support up to the 0.8500 level. Creates scope for higher short-term CHF gains. “
“We continue to believe that Joe Biden’s election victory supports our outlook for further USD weakness. We still expect the Fed to step up monetary easing to support the economic recovery after the weaker payroll report. At the same time, it should increase pressure on Congress to reach a bipartisan agreement to provide more fiscal stimulus. “
“We believe it is premature to see a sustainable downward reversal for currency degradation trades, especially if inflation recovers while maintaining loose monetary policy. The CHF has been one of the main beneficiaries of the currency degradation trade along with the price of gold. “
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